The story of a 21-year-old Stanford grad who wowed investors with a demo and raised $30 million for a mobile payments service. He soon lost scores of employees, and the company still hasn’t released a product:
Says one former growth team member, “I never saw a direct demonstration of the product.”
The growth teams met ambitious goals by targeting the most influential students on campus, such as group presidents and fraternity and sorority leaders. The leaders were shown some images from the website, and the deal was sealed with a compelling prize: If the entire organization signed up for Clinkle’s waitlist, then all of them downloaded the app on the day it became available, the group could win a $500 party, spa visit or stereo-system package. None of the pitches included a demo of the actual app.
After July, Duplan had dictated that no one — including potential hires and even some employees — would be shown the app anymore.
PUBLISHED: April 15, 2014
LENGTH: 19 minutes (4944 words)
How financial and personal pressure took a toll on an entrepreneur:
"Before the fundraising, Sherman would push himself and others to raise as much money as possible for their businesses. After the financing closed, he began referring to venture capital as a 'fraud' and a 'sham.'
"Employees could tell something was off when Sherman announced the financing to the team.
"'He said, "This is one of the hardest things I've ever had to do. And I hope to not have to raise more money for a very long time,"' a source recalls.
"Another source also recalled Sherman saying something alarming about this last round:
"'He said, "I had no business raising that last round of financing. I hadn't made our metrics or our terms—not anything near it. But I got it done."'"
PUBLISHED: April 5, 2013
LENGTH: 17 minutes (4430 words)